The Bank of England introduces new instruments of regulation of the real estate market

The UK government confirmed that the Finance Committee of the Bank of England given additional powers to manage the housing market in the UK.

Minister of urban development Andrea Leeds said that the Finance Committee will apply new tools to stabilize the housing market by imposing restrictions on the ratio of Deposit and loans for mortgage lending.

Additional powers vested in the Bank of England shall be given him, in order to minimize the risks in the housing market and protect market participants from financial losses.

Additional powers and tools the Bank of England will spread to other countries where there are clients of the Bank of England. Among them – Canada, New Zealand, Norway.

Under the new powers, the Financial Policy Committee of the Bank of England will also develop monitoring tools for mortgage loans under the program “buy to let”, in order to avoid risks to investors buying residential property in the UK with the aim of renting it out. Such measures not only help to provide financial stability to all market participants, but will avoid overheating in the housing market.

Meanwhile, there were cries of those who is opposed to additional regulation of the housing market. First and foremost, in the quality of the argument for them is the fact that millions of people across the country will be limited in their ability to get a mortgage and this can greatly slow down the development of the construction industry and housing market in the UK, which only began to recover after the crisis. Taxi to Dnepropetrovsk , There is a risk that the restrictions go too far. The recent slowdown in housing prices suggests that there are natural market mechanisms of regulation. Additional intervention from the Bank of England should be extremely careful not to bend the stick when the market will be blocked by excessive bans and regulations.

® Maxim Savitsky 04.02.2015

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